Contact Lens King – Tax Court of Canada finds that on-line sales of contact lenses were not zero-rated given failure to copy purchasers’ prescriptions

A GST/HST registered U.S. corporation sold and delivered contact lenses (typically replacement contact lenses) to Canadian consumers without verifying that they had a matching prescription. In finding that such sales were not zero-rated under Sched. VI, Pt. II, s. 9 (which requires inter alia that the contract lenses “are, or are to be, supplied under the authority of a prescription prepared … by [a qualified practitioner] for the treatment or correction of a defect of vision,” Smith J stated:

[I]t is not sufficient … that the appellant's website inform the consumer of the need for a valid prescription. The appellant must itself obtain a copy of the prescription … from which it can be concluded that the consumer has a prescription "for the treatment or correction of a defect of vision."

Neal Armstrong. Summaries of Contact Lens King Inc. v. The Queen, 2020 CCI 71 under ETA Sched. VI, Pt. II, s. 9 and s. 286(1).